Robert Borosage called it a revolt. On Firedoglake, the progressive blog, Ian Welsh called it the first shot in the next class war.
And Michael Moore said a coup was averted, while Glenn Greenwald called it a rejection of a corrupt ruling class.
With the financial sector of the economy teetering on the brink of what many economists were calling the worst catastrophe in decades, an odd coalition of progressive Democrats and conservative Republicans defeated a bipartisan bailout plan, a move that had pundits predicting economic devastation.
In the wake of the defeat, the pundits focused on the Republican back-benchers, the younger, hardcore populist conservatives who lack the ties to Wall Street that the leadership has developed over the years.
And the Republicans did make up the bulk of the opposition, but 95 Democrats objected, as well, primarily on the grounds that the package was a $700 billion giveaway, even if, as William Greider noted in The Nation, bells and whistles were added to make the transaction less obnoxious to public opinion, voters and taxpayers.
Steve Rothman (D-N.J.), who voted against the plan, said after the vote (quoted in The Record of Hackensack, N.J.) that there are better ways to fix the economic problems caused by this administration than this trickle-down Wall Street bailout program.
Any bailout, he said, had to include direct relief to homeowners and troubled banks and an economic stimulus.
And this is what a group of progressive Democrats did Sept. 30, the day after the original bailout compromise went down in flames. The progressive Democrats placed a new planthe No BAILOUTS Act (Bringing Accountability, Increased Liquidity, Oversight, and Upholding Taxpayer Security)on the table that John Nichols of The Nation says would impose a securities tax equivalent to one quarter of one percent of profits and empower the Federal Deposit Insurance Corporation to deal more effectively with bank failures.
The billsponsored by US Reps. Peter DeFazio (D-Ore.), Marcy Kaptur (D-Ohio), Robert Scott (D-Va.), Elijah Cummings and Donna Edwards (both D-Md.), Lloyd Doggett (D-Texas), Mazie K. Hirono (D-Hawaii) and Rush Holt, who represents my district in New Jerseywould change the way securities are valued, applying an economic value standard to measure the capital of financial institutions, as opposed to a market standard, an increase in the federal deposit insurance maximum and other accounting measures designed to create breathing room. It also would require the Federal Deposit Insurance Corporation to purchase certificates that would be repaid.
What Im proposing is to use both market discipline and regulatory functions at virtually no cost to taxpayers to unclog the arteries of commerce so banks can begin lending again, DeFazio said, according to The Oregonian.
In a letter introducing the plan, he said that Congress needed to take swift, uncomplicated steps to ensure the financial markets return to working order. After that, we can work to resolve the housing crisis and pass effective job stimulus.
Andy Stern, president of the Service Employees International Union, said the plan would restore confidence in the financial markets without writing a blank check to the same Wall Street banks and CEOs who got us into this mess.
This is an important, short-term solution that protects taxpayers and their savings accounts, he added. To revive the economy over the long-term, we must address rising unemployment, stagnant wages, the healthcare crisis, and a tax system that is tilted in favor of the wealthy.
The plan may or may not make its way through the House by the time you read thisthough something is likely to win approval, given the emergent nature of the financial situationbut it is important that the plan was raised as an alternative.
And, just importantly, DeFazio and the SEIU acknowledge that this is just the first step toward fixing the economy. Once a progressive rescue plan is in place, the Democratsbecause Republicans have a different agendaneed to alter bankruptcy rules and return some of the protections for individuals during recent reforms, create a rescue plan for homeowners facing foreclosure, enact a public works and green energy stimulus to get people working, fix the nations infrastructure and refocus the nations economy on sustainable principles.
Hank Kalet is a poet and managing editor of the South Brunswick Post and The Cranbury Press. Email email@example.com. See his blog, Channel Surfing, at www.kaletblog.com.
From The Progressive Populist, November 1, 2008
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